By Harold Kerzner, Ph.D

The landscape for project management changes almost every year. Some changes are relatively small or incremental whereas other changes can be significant. Historically, most of the changes appeared in the methodology, processes, tools, and techniques. Now, many of the changes are behavioral changes.

There will be a significant change in how we define the success (and failure) of a project. This is one of the changes I discussed last year, and I am reiterating the need for this change because some companies are still reluctant to make this change necessary for critical improvements in project management.

For years, the definition of project success was the creation of project deliverables within the constraints of time, cost, and scope. While this definition seemed relatively easy to use, and is still being used today, it created several headaches. First, companies can always create deliverables within time, cost, and scope, but there is no guarantee that customers would purchase the end results. Second, everyone seemed to agree that there should be a “business” component to project success but were unable to identify how to do it because of the lack of project-related business metrics. Third, this definition of project success was restricted to traditional or operational projects. Functional managers that were responsible for the strategic projects were utilizing their own definitions of project success, and many of these strategic projects were being executed under the radar screen because of the competition in the company for funding for strategic projects.

Another headache with the traditional definition of success was that its basis was on the belief that time, cost, and scope are the only three constraints on a project. When PMI introduced the concept of competing constraints, the definition of success had to ultimately change because it may be impossible to complete a project within all the competing constraints.

Today, companies believe they are managing their business as a stream of projects, including both strategic and traditional projects. As such, there must exist a definition that satisfies all types of projects. The three components of success today are: (1) the project must provide or at least identify business benefits; (2) the project’s benefits must be harvested such that they can be converted into sustainable business value that can be expressed quantitatively; and (3) the projects must be aligned to strategic business objectives.

With these three components as part of the project’s success criteria, companies must ask themselves when creating a portfolio of strategic projects, “Why expend resources and work on this project if the intent is not to create sustainable business value?” These three components can also be used to create failure criteria as to when to pull the plug and stop working on a project.

There will be a significant growth in the number of metrics, especially business-related metrics, to be use on projects When we discuss competing constraints, we must realize that many of the new constraints are business-oriented constraints. The business side of projects will need to be understood much better than in the past. This will require significantly more metrics than just time, cost, and scope.

Companies will need to create metrics that can track benefits realization, value created from the benefits and how each project is aligned to strategic business objectives. To do this may require the creation of 20-30 new metrics. Some companies have metric libraries that contain more than 50 metrics. This will undoubtedly lead to major changes in the earned value measurement systems (EVMS) currently be used.

The new project business metrics must be able to be combined to answer questions that executives have concerning business and portfolio health. The list below identifies metrics that executives need to make decisions concerning business and portfolio health.

  • Business profitability
  • Portfolio Health
  • Portfolio benefits realization
  • Portfolio value achieved
  • The mix of projects in the portfolio
  • Resource availability
  • Capacity utilization
  • Strategic alignment of projects
  • Overall business performance

The project-based business metrics must be able to be combined to create this list of metrics that executives need for business decision-making. Companies will have a metrics library since the number of metrics can become significant. Companies may use a set of “core” metrics that are required on each project but then establish other metrics unique to this project. Since each project many have different success criteria, the unique metrics must support the criteria for measuring and reporting success.

There will be a growth in the creation of manifestos attributed to flexible project management frameworks or methodologies that are capable of measuring benefits and business value as the project progresses and after the deliverables have been created. The traditional “waterfall” approach to project management implementation has been used successfully for years, but has the limitation that value is measurable primarily at the end of the project. Companies want to have value and benefits metrics reported throughout the project so that they can cancel or redirect non-performing projects.

Techniques such as agile and Scrum appear to do a better job measuring and report value created through the project than other approaches. In the future, we can expect more flexible project management approaches such as agile and Scrum to appear.

As new flexible frameworks appear, we will also see more documents like the Agile Manifesto that discusses the best ways to use the approach. I would expect most of the information in each new manifesto to be more behavioral that just continuous improvements in the processes, tools, and techniques traditionally used in project management applications.

There will be a significant change in the behavioral or people-oriented skill set that some project managers may need to support the introduction of new and more flexible methodologies. When there exists some commonality among the projects in a firm such that a one-size-fits-all approach can be used during project execution, the skill set for the project managers may be known with some degree of certainty. But when project managers are now responsible for managing new types of projects, especially with flexible frameworks, new skills may be necessary.

Flexible methodologies focus on better people-oriented leadership, more collaboration, and a concern for the health and well-being of the team members rather than just a focus on the creation of deliverables. Some of the newer skills being taught in people-oriented rather than task-oriented leadership on projects, how to conduct brainstorming sessions, design thinking and creative problem-solving.

Conclusions:

It is unrealistic to think that these will be the only changes that will occur in 2021. There will be other changes, but perhaps not as significant as these changes. The implementation of these changes requires that companies try to envision the future and plan for it beginning with changes to the corporate culture. For companies that believe in “business as usual” or “let’s leave well enough alone”, these changes will not be implemented. Those companies that believe in “doing things the same old way” will most likely struggle to stay in existence.